Robert MarquezProfessor of Finance

A leading expert in banking and corporate finance, Professor Robert Marquez tries to uncover the mechanisms that underlie the behavior of financial institutions. One important focus of his research now is the effect low interest rates have on banks and whether they encourage banks to take on more leverage.

A native of Southern California, Marquez earned his undergraduate degree in economics from the University of California, Berkeley, in 1990, then worked for several years for the Federal Reserve in San Francisco. He headed east for graduate school, earning a Ph.D. in economics from MIT in 1998.

Marquez spent eight years on the faculty of the University of Maryland before accepting a faculty post at Arizona State University’s W. P. Carey School of Business. After three years there, he crossed the country again to Boston University, where he was an Professor of finance.

His study, “Lending Booms and Lending Standards,” published in the Journal of Finance, offered an explanation for the sequence of financial liberalization, lending booms and banking crises observed in many emerging markets. It proved to be a telling recipe for financial disaster that could, and did, spread globally, with devastating impacts.

Marquez joined the Graduate School of Management faculty in July 2012.

“Financial Institutions and Financial Stability” is the fourth annual conference hosted by the School’s finance group. Organized by Professor Robert Marquez, the invitation-only forum brings together top researchers to present their latest insights on regulatory reform for financial intermediaries, the past and future role of capital for banks, crisis resolution, and liquidity provision by financial institutions. Speakers from Duke University, New York University, the University of Washington, the International Monetary Fund, and the Federal Reserve Bank will share insights from their latest research, with topics ranging from the response of banks to aid provided to them by the government, to the role capital plays at financial intermediaries, among others.

Evidence abounds that in the decade leading up to the 2008 financial crisis, banks significantly expanded their loan portfolios, often by extending loans to risky customers, and financing themselves primarily with debt. This led to a rash of bank failures as banks’ loans failed to repay.

A new University of California, Davis, study says that the low interest rate environment that prevailed throughout most of that period was likely an important determinant of that risky behavior.

As U.S. housing prices peaked during the real estate bubble in 2006, Boston University Associate Professor Robert Marquez and Giovanni Dell’Ariccia of the International Monetary Fund wrote a compelling paper showing that when banks have easy access to capital and demand for credit is high, the tendency is to take excessive risks that could endanger the financial system.

As U.S. housing prices peaked during the real estate bubble in 2006, Boston University Associate Professor Robert Marquez and Giovanni Dell’Ariccia of the International Monetary Fund, wrote a compelling paper showing that when banks have easy access to capital and demand for credit is high, the tendency is to take excessive risks that could endanger the financial system.

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